As Brussels progresses its regulatory overhaul for cigarettes and novel nicotine products, Big Tobacco lobbying is intensifying, revealing the industry’s fear of ambitious, public health-driven rules that risks compromising its commercial interests.
Recent developments on both sides of the Channel have brought the stakes into sharper focus. While the UK has just introduced a new system to tax and trace vaping products, September’s European Court of Auditors (ECA) report exposed serious weaknesses in the EU’s fight against illicit tobacco, with this soaring plague causing estimated annual tax revenue losses of €13 billion across the bloc.
Against this backdrop, the TPD overhaul presents a historic opportunity for Europe to strengthen its fight against illicit trade by introducing robust, independent traceability for vaping products – taking inspiration from the new British mode – while replacing a legacy tobacco traceability framework whose industry connections have long attracted criticism. With illicit production expanding and novel nicotine products increasingly reaching younger consumers, effective tobacco control must begin by ensuring that the industry cannot influence the systems intended to police it.
Vaping’s rapid expansion demands new approach
Across Europe, the growing popularity of vaping has created an increasingly complex enforcement challenge. Unlike traditional cigarettes, whose distribution is tightly controlled in many countries, e-cigarettes are available through a fragmented network of specialist retailers, convenience stores and online platforms that often operate under inconsistent oversight requirements. The regulatory void created by tobacco lobby-driven delays in revising the 2014 TPD – adopted before vaping became widespread – has raised mounting concerns about these products as a gateway to adolescent nicotine dependence.
Alongside these questions of accessibility, uncertainty surrounding vaping’s long-term health effects is becoming increasingly difficult to ignore. Although e-cigarettes can help some adult smokers move away from combustible tobacco, the University of Birmingham launched a major research programme in 2025 to investigate their potential negative effects on respiratory health, with a previous study from the same research team finding that toxicants in e-cigarette vapour can harm important immune cells. Meanwhile, defective batteries, unregulated liquids and products containing undeclared substances present more immediate safety risks.
Recognising these vulnerabilities, the UK has taken an important step towards stronger market oversight. On 1 October, HM Revenue & Customs introduced a new excise duty and traceability system for vaping products, with digital authentication requirements being phased in through 2027. Developed through a consortium bringing together British security printer Cartor and Swiss firm SICPA, the system combines physical security features, product identification and centralised traceability under public oversight.
As French public health NGO, the National Committee Against Smoking (CNCT), highlighted in October, this British approach offers an instructive model for EU policymakers as they look to overhaul traceability under the revised TPD. Crucially, the CNCT – a member of the EU-wide NGO coalition, the Smoke Free Partnership – emphasises that stronger taxation and tobacco industry-independent traceability systems constitute “two complementary levers” fully aligned with WHO FCTC and Protocol framework for countering illicit trade.
Europe’s deteriorating illicit tobacco market
The importance of independent oversight becomes particularly clear when examining Europe’s existing tobacco market. In its September report, the ECA notably concluded that the EU’s anti-illicit tobacco efforts remain fragmented and insufficiently informed by reliable data. With illicit manufacturing expanding across the continent and reaching record levels, the auditors cited estimated annual tax losses of €13 billion – a particularly alarming figure given Europe’s significant public budgetary pressures.
Yet perhaps more striking are the fundamental questions that the ECA leaves unanswered. Indeed, the report neglects to mention the EU’s legacy tobacco traceability system in place since 2019, overlooking its failure to effectively support customs and police investigations targeting the illicit market. Instead, its references to tracking and tracing focus on earlier cooperation agreements with tobacco manufacturers, which the auditors warn “lack transparency and risk undermining enforcement activities” – further strengthening the case for their long-overdue termination.
Rather than placing the blame on enforcement authorities, Brussels should first examine the independence of the data they are expected to rely on. Researchers at the University of Bath’s Tobacco Control Research Group have long raised concerns about the EU system’s independence, identifying extensive historical ties between tobacco manufacturers and approved traceability providers, including Dentsu Tracking. Such findings raise serious questions about compliance with the WHO Protocol, which prohibits delegating government traceability responsibilities to the tobacco industry, while underscoring why customs and police authorities need industry-independent intelligence.
A recent Belgian investigation into Luxembourg’s role in Europe’s parallel tobacco trade illustrates the scale of the problem, with an estimated 87% of the Grand Duchy’s cigarette supply ultimately consumed abroad. Such extraordinary volumes expose the tobacco industry’s deliberate oversupply of low-tax markets, fueling cross-border trade that undermines the ambitious tobacco taxation policies of neighbouring countries, particularly Belgium and France. Yet tobacco manufacturers continue to blame the very tax increases designed to reduce smoking for the rise in illicit trade.
History offers a revealing counterexample in Canada, where a surge in cigarette smuggling during the 1990s helped force the government to reverse ambitious tobacco tax increases – a measure the WHO identifies as the single most effective tool for reducing tobacco consumption, whose importance was recently reaffirmed by the newly-appointed Head of the WHO FCTC Secretariat, Andrew Black. However, subsequent proceedings exposed the involvement of tobacco manufacturers themselves in Canada’s illicit market, with JTI-Macdonald and a company linked to R.J. Reynolds pleaded guilty to contraband tobacco-related offences in 2010, alongside settlements and penalties totalling $550 million. Crucially, this episode underscores how industry-driven illicit trade undermines strong tobacco control policy.
When industry influence reaches the regulators
The controversy surrounding Dentsu Tracking reveals another dimension to these concerns around Big Tobacco’s illicit trade interference. Selected to operate the EU’s central tobacco data repository, the company acquired Blue Infinity, a technology business previously involved with Codentify, the controversial traceability system originally developed by Philip Morris International (PMI). Questions about Dentsu’s presence in the EU tobacco traceability system intensified following its recruitment of Jan Hoffmann, a former DG SANTE, prompting European Parliament scrutiny of possible conflicts of interest and revolving-door practices. And while Dentsu was acquired by Czech technology group Aricoma in August 2026, new ownership and branding do not erase its controversial past – particularly as Aricoma itself lists Philip Morris among its clients.
Beyond Europe, recent revelations in Brazil provide a troubling illustration of how commercial interests can seek to influence public systems. In a major investigation published on 14 October, Brazilian magazine piauí revealed a proposed consultancy arrangement involving Dentsu Tracking and Paulo Ricardo de Souza Cardoso, a former senior official at Brazil’s Federal Revenue Service. According to documents obtained by the publication, the proposal envisaged monthly payments alongside substantial bonuses should Dentsu secure government contracts for beverage or cigarette traceability. Drawing on recorded conversations and internal correspondence, the investigation reveals alleged efforts to obtain privileged information and shape Brazil’s regulatory requirements in Dentsu’s favour. In one recording, Dentsu executive Philippe Castella, himself a former PMI employee, notes the tobacco company’s strong support for replacing Brazil’s existing cigarette-monitoring technology.
A historic opportunity to restore independent control
With the TPD revision approaching, Brussels has an opportunity to break this cycle of Big Tobacco interference. Drawing on the UK’s emerging vaping model, Europe should establish independently governed traceability for new nicotine products while replacing its existing tobacco system to comply with the WHO Protocol and begin tackling the illicit trade effectively. As the experiences of Europe, Brazil and Canada demonstrate, tobacco control policy cannot achieve its objectives when the industry’s commercial interests are allowed to compromise the independence of those entrusted with enforcing it.
